A Gas Discovery in Egypt Threatens to Upend Mideast Energy Diplomacy

 

New York Times

Photo

 

Eni's Damietta liquefied natural gas plant in Egypt. Credit Eni 

 

By STANLEY REEDOCT. 28, 2015

 

 

The Italian energy company Eni knew it was taking a big risk this summer when it spent $60 million on an exploratory rig and began drilling more than 100 miles off the coast of Egypt.

Eni’s gamble worked. The company, using drilling rights from the Egyptian government, found what it called a “supergiant” natural gas field. It may be the largest discovery yet in the Mediterranean and is one of the world’s biggest new gas finds in years.

Eni will need to drill more wells to prove its claim that the field, which it calls Zohr, holds up to 30 trillion cubic feet of gas. That could be worth about $100 billion, even when taking into account current low energy prices. But the promise of Zohr — the Arabic word for noon — is already brightening the prospects of the Egyptian economy, which has been benighted by an energy shortage and years of political turmoil.

 

As with so many things in the Middle East, however, the discovery of the gas field has geopolitical repercussions. And it has thrust Eni’s chief executive, Claudio Descalzi, into the role of shuttle diplomat.

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Putin Informs European Leaders Ukraine Debt May Affect Gas Transit. Reminding Them That Aid To Ukraine Is Not Infinite.

Radio Free Europe/Radio Liberty

Putin Tells European Leaders Ukraine Debt May Affect Gas Transit

Russian President Vladimir Putin (right) speaks at a meeting with top officials on gas deliveries to Ukraine at his Novo-Ogaryovo state residence outside Moscow on April 10.

By RFE/RL

April 10, 2014

Russian President Vladimir Putin has sent a letter to leaders of 18 European countries warning of a suspension of gas supplies to Ukraine if Kyiv does not pay off its $2.2 billion gas debt.

The Kremlin said on April 10 that Putin told the European leaders that the "critical situation" over Ukraine's debt could impact the transit of Russian gas to much of Europe.

He wrote that the state-controlled energy giant Gazprom would be "compelled to switch over to advance payment for gas deliveries" for Ukraine and that if Ukraine remains unable to settle its debt, Gazprom "will completely or partially cease gas deliveries."

Putin raised concerns about Ukraine siphoning off gas from pipelines leading to Europe and said Ukraine needed some 11.5 billion cubic meters of gas, worth some $5.5 billion, to fill the country's underground storage tanks.

Putin also wrote Russia is prepared to take part, along with the European Union, in efforts to restore Ukraine's economy.

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Aid to Ukraine not forever: Putin

April 10, 2014 International

Vladimir Putin

MOSCOW. — Russia does not recognise the legitimacy of Ukraine’s new authorities, but continues its economic assistance to its crisis-hit neighbour, a situation that will not last forever, Russian president Vladimir Putin said yesterday.
“As you know, our partners in Europe recognise the legitimacy of the current Kiev authorities, but are doing nothing in order to support Ukraine; not a single dollar, not a single euro,” Putin said.
“The Russian Federation doesn’t recognise the legitimacy of the authorities in Kiev, but will continue to give it economic support and subsidise Ukraine’s economy with hundreds of millions and billions of dollars for now.
“This situation, of course, can’t continue eternally,” the Russian leader added.
He demanded that Russia remain disciplined and fulfil all contract obligations with Ukraine, but added that the country must be prepared to replace Ukrainian goods and correct state defence orders.
“I ask you to be disciplined and fulfil all contract obligations with our Ukrainian partners, but we need to be prepared for any development in the situation . . . including import replacements,” Putin said during a meeting of senior officials.

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Little expected from Ukraine talks

Updated: 04:53, Thursday April 10, 2014

The US says it is going into an upcoming meeting with Russia, Europe and Ukraine on the crisis in the former Soviet republic with low expectations.
'I have to say that we don't have high expectations for these talks, but we do believe it is very important to keep that diplomatic door open and will see what they bring,' Victoria Nuland, assistant secretary of state for European affairs, said on Wednesday.
US and EU diplomats have agreed with Russia to hold four-way negotiations involving Ukraine next week to de-escalate the worst European security crisis in decades.
An EU diplomat said the talks would likely be held on April 17 in Vienna.
In signs that Russia will continue its pressure on the Ukraine, President Vladimir Putin has warned the country may begin requiring advance payment for gas supplies unless Ukraine comes to the negotiating table over its unpaid energy bills.

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Ukraine Situation Could Become Very Pricey For All Concerned ...... Mess With The Bear , Get The Claws ?

Price tag for Russian gas to Ukraine could rise to $500

Published time: March 20, 2014 12:10

Reuters / Sergej Vasiljev

The price of Russian gas to Ukraine could rise to $500 per 1,000 cubic meters, as future developments in relations between Moscow and Kiev remain vague.
From April 1 the price Ukraine pays for Russian gas will go up to $360-$370 per 1,000 cubic metres, after Russia cancelled the discount agreed in late December, Pavel Zavalny, the head of Russian Gas Society told Izvestia newspaper.
In the worst case scenario, and Ukraine decides to take over Russian property, as well as new threats from radical nationalists, the price could jump to as high as to $500, the paper added.

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Russia to redirect trade elsewhere in case of EU-US sanctions

Published time: March 19, 2014 16:59

Russian President's Press Secretary Dmitry Peskov (RIA Novosti / Aleksey Nikolsky)

 

Russia will switch to other trade partners if economic sanctions are imposed by the US and the European Union, the Russian President's Press Secretary Dmitry Peskov has said.
"If one economic partner on the one side of the globe impose sanctions, we will pay attention to new partners from the globe’s other side. The world is not monopolar, we will concentrate on other economic partners," RIA news quotes Peskov.
According to him, possible economic sanctions by the US and EU on Russia are unacceptable, and the Russian Federation intends to offer further economic cooperation with the European Union.
"We want to keep good relations with the EU and with the US. Especially with the European Union as it is the main economic, investment and trade partner of the Russian Federation. Our mutual economic dependence assumes that we shall have good relations," the Russian President's Press Secretary declared. He also emphasized that discussion of global economic problems without involvement of Russia can't be a complete discussion.
In a Tuesday telephone conversation between Russia’s Minister for Foreign Affairs Sergey Lavrov and the US Secretary of State John Kerry they discussed the situation in Ukraine, and Lavrov said sanctions imposed by the US and the European Union against the Russian Federation are absolutely unacceptable and won’t come without consequences.
According to data from the EU’s Eurostat, Russia accounts for 7 percent of imports and 12 percent of exports in the 28 European Union bloc, making it the region's third most important trading partner, behind the USA and China.
In turn, the EU is Russia’s biggest trade and investment partner, with trade turnover estimated at $330 billion in 2012.

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Obama Approves Major Border-Crossing Fracked Gas Pipeline Used to Dilute Tar Sands

Although TransCanada's Keystone XL tar sands pipeline has received the lion's share of media attention, another key border-crossing pipeline benefitting tar sands producers was approved on November 19 by the U.S. State Department.

Enter Cochin, Kinder Morgan's 1,900-mile proposed pipeline to transport gas produced via the controversial hydraulic fracturing ("fracking") of the Eagle Ford Shale basin in Texas north through Kankakee, Illinois, and eventually into Alberta, Canada, the home of the tar sands. 

Like Keystone XL, the pipeline proposal requires U.S. State Department approval because it crosses the U.S.-Canada border. Unlike Keystone XL - which would carry diluted tar sands diluted bitumen ("dilbit") south to the Gulf Coast - Kinder Morgan's Cochin pipeline would carry the gas condensate (diluent) used to dilute the bitumen north to the tar sands.

"The decision allows Kinder Morgan Cochin LLC to proceed with a $260 million plan to reverse and expand an existing pipeline to carry an initial 95,000 barrels a day of condensate," the Financial Post wrote. 

"The extra-thick oil is typically cut with 30% condensate so it can move in pipelines. By 2035, producers could require 893,000 barrels a day of the ultra-light oil, with imports making up 786,000 barrels of the total."

Increased demand for diluent among Alberta's tar sands producers has created a growing market for U.S. producers of natural gas liquids, particularly for fracked gas producers.

"Total US natural gasoline exports reached a record volume of 179,000 barrels per day in February as Canada's thirst for oil sand diluent ramped up," explained a May 2013 article appearing in Platts. "US natural gasoline production is forecast to increase to roughly 450,000 b/d by 2020."

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Document shows Democrats preparing to target tax breaks for the wealthy and corporations, but omits those for industry fueling climate disaster

Published on Monday, November 11, 2013 by Common Dreams

Democrats to Target Tax 'Loopholes'—But Not for Fossil Fuel Industry

- Andrea Germanos, staff writer

A document obtained by several news agencies last week shows Democrats preparing to target tax breaks for the wealthy and corporations as part of congressional negotiations to meet a Dec. 13 deadline for a budget deal.
(Photo by Neil Parekh/SEIU Healthcare 775NW) Not on the list of Democrats' targets: tax breaks for the fossil fuel industry.
The Hill reported that the list

contains 12 examples of the types of “tax loopholes” that [Democrats] would like to see closed in a year-end budget deal. Most have been proposed many times before.
Combined, the items on the list would raise $264 billion in revenue over 10 years, more than enough to switch off two years' worth of the automatic budget cuts known as sequestration.

Bloomberg reported that

In addition to closing what Democrats call the “John Edwards/Newt Gingrich loophole,” the party’s list of options includes carried-interest treatment that allows hedge fund managers and private equity advisers to pay a 20 percent tax rate on their income instead of the nation’s top income rate of 39.6 percent. Ending that break would save more than $17 billion over a decade, according to the Democrats’ estimates.
Another lets U.S. companies deduct their expenses when they send their plants overseas, which Democrats say encourages offshoring of American jobs. It would raise $200 million. Ending preferences for corporate jets and subsidies for yachts and vacation homes, combined, would bring in another $19 billion.

"The list makes clear that Democrats believe they can win public support by targeting tax breaks that they can portray as subsidies for the rich," according to Reuters.
Republicans have been demanding cuts in Social Security and Medicare in exchange for changes to sequestration spending cuts, and that has failed to be met by a widespread Democratic pushback.
Progressives like Sen. Bernie Sanders (I-Vt.) have called for an "End [to] tax breaks and subsidies for oil, gas and coal companies to reduce the deficit by more than $113 billion over the next 10 years"—a call echoed by the Congressional Progressive Caucus's "Back to Work Budget," which calls for an elimination of corporate tax subsidies for oil, gas, and coal companies.
But preserving tax breaks for the fossil fuel industry appears to have widspread bipartisan consensus.
The fact that fossil fuel companies are not on the list of targets may be a result of Democrats' "embrace" of fossil fuels, the Financial Times reported.
James Politi reported at the Financial Times that the omission may "point to an increasing willingness among Democrats to embrace America’s domestic energy boom as a source of economic strength."
The FT also quotes the American Petroleum Institute as saying there is "growing bipartisan opposition" to taxes that target oil and gas industries.

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Ecuador Takes on Chevron

freespeechtv·

Published on Sep 24, 2013

 

Ecuador's Foreign Minister Ricardo Patiño discusses his government's involvement in two closely watched environmental legal battles. An Ecuadorean court has ordered the oil giant Chevron to pay $19 billion to indigenous and rural Ecuadoreans for the dumping of as much as 18.5 billion gallons of highly toxic waste sludge into the rainforest. But Chevron has refused, winning a partial victory last week when an international arbitration panel based in the Hague delivered an interim ruling questioning the validity of the original 2011 verdict.

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Ecuador Takes on Chevron, Global Indifference in Controversial Fights to Protect Rainforest

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Guests

Ricardo Patiño, Ecuador’s Foreign Minister.

Mar 14, 2012 | Story

During a visit to New York City for the United Nations General Assembly, Ecuador’s Foreign Minister Ricardo Patiño joins us to discuss his government’s involvement in two closely watched environmental legal battles. An Ecuadorean court has ordered the oil giant Chevron to pay $19 billion to indigenous and rural Ecuadoreans for the dumping of as much as 18.5 billion gallons of highly toxic waste sludge into the  rainforest. But Chevron has refused, winning a partial victory last week when an international arbitration panel based in the Hague delivered an interim ruling questioning the validity of the original 2011 verdict. Patiño also addresses why Ecuador recently dropped a plan to preserve swaths of the Amazon rainforest from oil drilling by having wealthy countries pay them not to drill, an effort that the Ecuadorean government says failed to attract sufficient funding. Leading environmentalists, including Vandana Shiva, Naomi Klein and James Hansen, recently wrote an open letter to President Rafael Correa asking him not to forsake the initiative, saying: "Along with thousands of other world citizens, we look to the Yasuní-ITT initiative as a pioneering step in the international struggle for a post-fossil-fuel civilization. We have been inspired by the determination of the Ecuadorean public to rejuvenate the initiative following your government’s recent decision to abandon it."


Read Full Transcript and Watch Full Video Here


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